According to the Financial Association on January 2 (Reporter Zhu Wanping), the production of base liquor for Kweichow Moutai slightly decreased in 2024, while the company’s revenue grew over 15%, reaching the target set at the beginning of last year. During the period of soft stock prices, Kweichow Moutai (600519.SH) also officially initiated a buyback, with nearly 0.3 billion yuan repurchased on the first day, accounting for 5%-10% of the buyback amount (3 billion-6 billion yuan).

This evening, Kweichow Moutai announced that, after preliminary calculations, the company expects to achieve total operating revenue of approximately 173.8 billion yuan in 2024, an increase of about 15.44% year-on-year; and is expected to achieve net income attributable to shareholders of approximately 85.7 billion yuan, a year-on-year increase of about 14.67%.

This net income growth rate roughly meets market expectations, and the company’s revenue growth rate has also reached the 15% target set at the beginning of last year. According to Wind data, since August of last year, 56 brokerages have made predictions on Kweichow Moutai's net income for 2024, with an average forecast of 86.071 billion yuan.

Since 2020, Kweichow Moutai's annual reports have disclosed that the net income attributable to shareholders has consistently been higher than the company’s preliminary data, with differences ranging from 0.1 billion to -1.3 billion yuan. Considering this situation, it cannot be ruled out that Kweichow Moutai's final report performance may exceed the average expected by brokerages (86.071 billion yuan).

By product, in 2024, Moutai liquor is expected to achieve operating revenue of approximately 145.8 billion yuan, a year-on-year increase of 15.18%; the Moutai series of liquors is expected to achieve operating revenue of approximately 24.6 billion yuan, a year-on-year increase of 19.24%. The growth rate of the Moutai series of liquors continues to outpace that of Moutai liquor, increasingly highlighting its role as an "important growth driver."

However, due to the promotion and increased volumes of the Moutai series of liquors last year, Kweichow Moutai's overall net margin has come under pressure. Rough calculations suggest that in 2024, Kweichow Moutai's net margin may drop to below 50%, the lowest level since 2018. This year, the Moutai series of liquors will further increase market investment, raising marketing expenses by 1.5 billion yuan compared to 2024, an increase of over 50%; with current price pressures on the Moutai series of liquors, but with an increased revenue proportion, the company's overall net margin may further decline.

From a quarterly perspective, in last year's Q4, Kweichow Moutai is expected to achieve total revenue of approximately 50.677 billion yuan, a year-on-year increase of about 12.01%; the expected Net income attributable to shareholders is about 24.872 billion yuan, a year-on-year increase of approximately 13.79%, with a quarterly net margin of around 49.08%. Overall, the net income growth rate of Kweichow Moutai in Q4 last year outpaced the revenue growth rate during the same period, which is mainly attributed to the increase in production of Moutai liquor and other products. In Q4 last year, Moutai liquor and Moutai series liquor achieved revenues of 44.674 billion yuan and 5.207 billion yuan, respectively, with year-on-year increases of approximately 13.62% and 3.40%.

In terms of base liquor production, last year Kweichow Moutai produced about 0.0563 million tons of Moutai liquor base liquor, a year-on-year decline of 1.58%, and approximately 0.0481 million tons of Moutai series liquor base liquor, a year-on-year increase of 12.02%. It is important to note that a new production workshop for Moutai, the 31st workshop, was put into operation in October last year and officially started liquor production. Given the new workshop's launch, why did the production volume of Moutai liquor base liquor slightly decline last year?

According to reporters from the Financial Associated Press, Moutai liquor has a one-year production cycle, and the newly put into operation 31st workshop will reflect production capacity next year. "It has been clarified that the production of Moutai liquor last year was within a normal and orderly Range," a person close to Kweichow Moutai told reporters from the Financial Associated Press.